Banks, and particularly American Express, have been cracking down on activities they consider as “gaming the system.” This can result in anything from denying a sign-up bonus for buying a single gift card, clawing back $5 because their own systems paid you for two separate offers, to a total shutdown of your accounts for any activity they don’t like.
The consensus of those on the outside looking in was that the AMEX RAT (Rewards Abuse Team) team was continually looking for a reason to exist. It was formed to close the most egregious exploitations of the system and was successful at that task. Does anyone think it was right to have 99 authorized users and sign up for an AMEX Offer for all of those cards? Probably not, but for those who took advantage of the loopholes, the reasoning was if you can do something, why not.
The AMEX RAT team took the approach that if you got rid of all the bad apples, there was no harm if you threw out some good apples in the process. After all, there were plenty of apples to go around.
In an instant, the world changed. The stock market has entered bear market territory less than a month from when it was hitting new highs. The global economy is slowly grinding to a halt.
What’s a RAT to do?
Option 1
American Express will undoubtedly be under financial pressure in the upcoming months and probably years, no matter if they get a government bailout or not. Customers will not want to spend annual fees for co-brand credit cards with travel credits if they’re not traveling. For those who are still willing to sign up for those cards, AMEX will want to do everything they can to keep those customers. Will they want to give a pop-up box informing an applicant they’re not able to get a sign-up bonus?
What about AMEX’s once in lifetime application rule. If you had a Platinum card in 2015, will they deny you a bonus in 2020 for a card with a $550 annual fee?
How about those loopholes? AMEX made it so difficult to use credits before, but will they open up and let you use these benefits for any expense? Remember, AMEX’s financials, and those of the travel partners, are based on how many points can be generated through spending on these cards.
If AMEX wants to get back some of the business they’ve alienated over the past five years, they can roll back all of these customer-unfriendly policies. Let people apply for cards they’ve had before. Relax the travel credit rules. Disband the RAT Team, as they’ve served their purpose. I guarantee that the travel hacking community will have a short memory about how badly you’ve treated them if you make it worth their while.
Option 2
I’m not going to call this the nuclear option, but it would be AMEX doubling-down on the ability of the RAT Team to deliver a return on investment.
The RAT Team could convince the top brass at AMEX that the only way to weather the financial storm is to prevent all abuse in their card portfolio (both proprietary and co-brand cards). They’d make it so you’d only be able to have one kind of card that earns Membership Rewards, period. Same for their co-brand cards. Sign-up bonuses would be limited to 48 months per card family.
New applications will be subject to a rigorous financial review requiring you to submit documents to confirm your income. Finally, any supposed abuse would cause the closure of all of your American Express accounts, both personal and business, with no possibility to appeal.
I sure hope this isn’t the route AMEX takes, but I will understand why, if it ends up being what happens.
Final Thoughts
I’m sure hoping this crisis leads to AMEX realizing that the RAT Team had gotten out of control. Sure, some of the changes they made were long overdue. I doubt if you’d find many cardholders that would say banning self-referrals for new cards or closing accounts of those who edited an URL to be eligible for a sign-up bonus not intended for them are excessive policies.
However, they kept trying to cut and cut just to show increased cost savings. Should you lose out on a sign-up bonus because you purchased a $250 gift card for a present when meeting your spending requirement? What about if someone you refer cancels their card before the renewal period? Is that your fault?
The RAT team has done its job, and if there’s an area that’s not necessary for this new environment, I will put this department at the top of the list.
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This post first appeared on Your Mileage May Vary
Cover Image by Jacques GAIMARD from Pixabay
13 comments
A sensible perspective. Hopefully American Express has a belated outbreak of common sense, although in my experience companies rarely go from being fairly antagonistic toward customers to being friendly toward customers in a short period. Crossing my fingers that this will be one of the rare occasions. Amex used to be renown for top notch customer service, so they do have the experience with that mentality.
I don’t think you understand how Amex policies work. The lifetime policy has nothing to do with the abuse of self referrals. Abuse is not profitable, no matter the market conditions.
I understand how AMEX policies work. The referral abuse was wrong. The lifetime policy is a monetary decision and circumstances will force them to reevaluate those choices.
Airlines and Saks Fifth Avenue, etc will probably want Amex to allow gift cards to count towards incidental credits and if Amex is smart, get those companies to subsidize a portion. Cash in hand for gift cards redeemed later or never is something these companies will desperately need.
They could also just load the whole yearly UBER credit for those who now want to use it now for UBER Eats. So many things they COULD do to make up for treating customers poorly when times were good.
Terribly written. Please take grammar and style courses. Unnecessary commas, sentences that don’t make sense, etc., etc.
Thanks for the comment. Now I have something to do with my free time.
This just feels like an article written by someone butt-hurt about getting denied a welcome bonus offer. Pardon my French. But see, it’s a very tiny perspective presented to appeal to the masses who have suffered through the “tyranny” of Amex. At a time like this, American Express is stepping up for us in ways that are far better than whining on about a sign up bonus. And despite the relaxation they’re offering, you want the twist their arm over something that is a fair enough policy. I would demand a retraction but I’ve been a happy Amex user for nearly three decades and the company is nothing if not fair. Also, they’re still at work, literally risking their well-being, waiving off late fees and interest charges. Show some gratitude. And the next time you fill out an application and the window says you’re not eligible for the offer decline the application and move on.
I’m not butt-hurt by AMEX. I’ve never been denied a bonus or even seen the dreaded pop-up. While AMEX has instituted some changes to block the worst offenders, many loyal cardholders have been targeted. Don’t believe me, just Google it. And for showing gratitude to a bank, not going to happen.
I am confused. Why should anyone allow abuse? It just makes it harder for those of us that don’t abuse the system. Maybe we wouldn’t be having to spend $250K a year to get Diamond status if people had played fair.
I never vouched for allowing abuse. It was the overreaction that I have a problem with. If I want to buy a $250 or $500 gift card with a new CC, it shouldn’t invalidate my entire bonus even if I spend enough without counting that amount. Signing up for a card for 1 year, paying the annual fee for 2 years and canceling shouldn’t be viewed as gaming the system. AMEX’s vague rules and haphazard application are what led to this problem and I hope they use this time to reevaluate their processes.
Ignore the haters. The article is written well and is balanced. Ignore the people putting words in your mouth, because it’s a good piece.
Just to update you — the RAT team is still in full force as of late August 2020. In my particular case, they have decided to deny all Delta SkyMiles for purchases that they ‘suspect’ don’t qualify under their terms and conditions… Since the retailers (in this case, ‘US Supermarkets’ category) don’t send identifying information as to what was actually purchased, they just base their suspicion on transaction amount and volume and place the onus on the cardholder to ‘prove’ that the transaction(s) were for qualifying items.
I was quite shocked when they told me that all base and bonus miles were being denied unless I wanted to send ‘all’ of my receipts to them for verification.
Hope this provides a little insight as to their direction for policing cardholders and rewards-earning activity.